Question

Describe a firm's macro environment and how managers use PESTEL to understand it.

a) Macro environment includes internal factors only; PESTEL is a tool for micro-environment analysis
b) Macro environment involves external factors affecting a firm; PESTEL examines political, economic, social, technological, environmental, and legal factors
c) Macro environment focuses on short-term factors; PESTEL assesses long-term strategic elements
d) Macro environment is irrelevant for business planning; PESTEL is applicable only to startups

Answer 1

The macro environment of a firm includes external factors that affect the business. Managers use the PESTEL analysis tool to understand and analyze these factors.

Step-by-step explanation:

The macro environment of a firm consists of external factors that affect the business, such as political, economic, social, technological, environmental, and legal factors. Managers use the PESTEL analysis tool to understand and analyze the macro environment. PESTEL stands for Political, Economic, Social, Technological, Environmental, and Legal. By conducting a PESTEL analysis, managers can identify and assess the key factors in the macro environment that may impact their business strategy and decision-making.